Labour Code proposes community service as punishment to CEOs for Labour Law Violation
Some chief executives of companies might soon be on the streets cleaning public spaces, painting walls or serving the poor, not for charity, but as punishment for violating the country’s social security laws.
The draft labour code on social security 2018, prepared by the labour and employment ministry, has proposed the concept of a ‘community service order’, a common practice abroad. The law will enable courts to direct businessmen and workers to do unpaid work in the community.
“For a businessman, who is financially well off, monetary penalties will not have any impact. This system will ensure the person does not go to jail for violating the law but is made to serve the community, which might act as a deterrence,” said a senior labour and employment ministry official.
The draft law proposes to provide social security cover to around 500 million workers in the workforce.
At present, companies hiring at least 20 workers are covered by schemes administered by the Employees’ Provident Fund Organisation (EPFO) and those with at least 10 workers are provided medical facilities by the Employees’ State Insurance Corporation (ESIC). Only about 50 million workers are covered under social security laws in the country at present.
A community service order will be in exchange for penalty or violations that attract jail term of up to two years, under the Labour Code on Social Security 2018.
Some of the violations that will lead to community service include failure to pay social security contribution of workers, maintain records, furnish information to inspectors, pay gratuity to workers, provide creche facility and medical pay, and retrenching women workers during maternity leave.
As May as 48,750 firms are in the EPFO’s defaulters’ list for not submitting provident fund contributions for March this year, as per official records. Further, at present, the EPFO is closely monitoring 433 big companies that have set up their own trusts for managing provident fund accounts of their workers for possible defaults.
Community service, as a penalty, is a common practice in many countries, such as England, the United States, France, Germany and Sweden.
Last year, a court ordered former England football team captain Wayne Rooney to carry out 100 hours of unpaid community work for drunk-driving. Rooney did community service in a garden centre, which included painting park benches. The judge had said not “even a high-level fine would have the same punitive effects as a community order.”
“In many countries, community service is a punishment for criminal law but not for violation of labour laws.
This move, in the context of India’s labour laws, will dilute the rigour of the law and make the social security framework employer-friendly. The employers should fear they will be prosecuted and it will lead to imprisonment for non-compliance,” said Ramapriya Gopalakrishnan, a labour law advocate.
According to the proposed law, businessmen will still be required to serve jail for serious violations, which have a provision for imprisonment for more than two years. For instance, employers who deduct money from their workers’ monthly salaries but do not submit the contribution towards social security funds will serve three years in jail.
“Any person committing an offence, with regard to social security legislation, does not commit an offence against an individual, but against society as a whole, thereby putting the entire social security system in jeopardy and should be reformed against committing such acts in future,” the draft law said, explaining the rationable behind community service order. The offender will be required to undertake social work for a particular number of hours within two years of the court order.
However, according to the draft, the offender will be given a choice of whether they want to do community service or pay a fine and serve the jail term. The proposed law said the central government would frame rules to regulate the conditions, manner of operation and revocation of community service orders.
In some cases, not only employer, but also workers might be asked to do community service for violating the law’s provisions. This might include claiming medical leave on a false certificate, not paying social security contribution for self-employment, and receiving dual benefits of sickness and maternity in the same period.